Apex: Back from the brink
By George Koch
Apex, the delightful little ski resort west of Penticton, came within inches of getting sent up to the happy carving grounds in the sky, resort insiders report. Ongoing disputes with three local native bands have so spooked investors that Apex, one of only two publicly traded ski plays in North America (Intrawest Corp. being the other), was unable to pay many of the bills incurred in last season's expansion. Apex's Penticton ski shop couldn't open for the summer season because suppliers had put it on C.O.D. and, one source reported, quad-builder Doppelmayr was threatening to send its heavies to rip its lift back out, tower by tower.
"Living with this uncertainty created a terrible, terrible situation," says Fraser Martin, a former ski writer who was appointed president of Apex Resorts Corp. on April 1, 1994. (Apex's former president Bill Trimble, the Vancouver financier who rescued Apex from bankruptcy in 1988 and took it public two years ago, remains as CEO and will concentrate on fund raising). "It's creating a downturn in our financing capacity," says Martin. "We've got a whole bunch of interested people sitting and waiting."
What with last season's excellent snowfalls, construction of a full-length quad and Holiday Inn Sun Spree Resort hotel, all-time record crowds of 117,000 skier-visits and a great spring that extended the season beyond even Whistler's closing, Apex stock traders should have been out buying snappy new suspenders and bow ties. Instead, the parent company's stock is trading at near-record lows (it closed at 31 cents on the VSE May 18, just above its all-time low of 29 cents). Sales of its $125,000, time-share style investment units, which entitle investors to 42 days of resort use annually, generated only two-thirds of the capital projected.
Luckily, the provincial government seems to be getting serious. The final $3 million instalment of an $8 million loan guarantee was announced May 5, alleviating owners' and creditors' migraines. Hotel builders and Doppelmayr are still owed $1.5 million. The guarantee is hardly free money, however. The province is charging a one per cent annual fee, and lenders are slapping a risk premium and bank fee of a further two per cent above prime interest rates.
"$240,000 in interest would buy a lot of landscaping for our summer season," points out John Kapusty, Apex's director of sales and marketing. Still the deal lets Apex now concentrate on raising equity for the next phase of its expansion, which includes summer facilities like golf facilities and tennis courts, more condos and a new restaurant complex. "People are ready to come in with money," says Martin. "They just need to have confidence that the project won't be torpedoed."
Even more important, Martin and others take the loan guarantee as a signal that the governing NDP is committed to Apex's success and is therefore serious about resolving the dispute with the Penticton, Upper Similkameen and Lower Similkameen bands. They straddle all three access roads to Apex. Their five-week blockade last fall caused all kinds of bad publicity, put 250 on-mountain jobs at risk, delayed Apex's opening by two weeks, led to many holiday cancellations — and caused investors to fold up their chequebooks.
Apex had previously tried to work with the bands, providing on-hill jobs for band members and treating their environmental and traffic concerns seriously. But now, the resort appears fed up. The managers have concluded the bands are not really concerned about the issues they're voicing, but are using Apex as a pawn to lever money and land out of the government (the informal "Seven Peaks" claim encompasses Apex).
"The other issues are a ruse, and you can quote me using that word," says Martin. "We need to see the government get tough on blockades and lawlessness. All people, native or non-native, must follow the same rules." And, lest anyone think Apex is blaming only the natives, Martin has this to say to the NDP: "The dilemma was also caused by the inability of the government to deal with the situation."